LLQP Practice Questions

Laraine wants to purchase an Individual Variable Insurance Contract (IVIC) because of the death benefit guarantee as she has been ill. She has decided on a segregated fund which has, as its underlying asset, units of a mutual fund that invests in North American common shares. Her insurance agent, Jeffrey, wants her to understand key issues before she completes and signs the application. What should Jeffrey do?

Jordan, a group insurance agent, meets with Nancy, a commercial berry grower in Saskatoon, to renew her company's group insurance plan. When the plan was established four years ago, Nancy had 20 employees. She now has over 50 employees, many of whom are unhappy with the plan. Jordan wants to rectify this situation to everyone’s satisfaction but is not sure how to begin.

Which of the following options indicates the first step that Jordan should take?

Amani owns Amani's Passions, an eco-friendly cosmetics company she started in her garage three years ago. The business is booming—so much so that Amani's Passions recently hired over 20 employees to keep up with demand. Now Amani wants to set up a group insurance plan for her staff.

Whose role is it to solicit quotes from insurers and put the right plan in place?

Today, Sabrina suffered a severe stroke. She owns a 20-year term critical illness policy that specifically covers this medical condition. Her contract provides for a $100,000 critical illnessbenefit after a 30-day waiting period. It also includes a return of premium rider on death and maturity. Sadly, Sabrina dies 28 days after her stroke. What will the insurer do in this situation?

Lara, owner of Huck’s Oil Change Ltd., meets with a life insurance agent to discuss a renewal package for the group benefits plan offered to employees. Lara employs 20 individuals, all of whom are covered under the group plan. The employee turnover rate is 10%, and the insurer has rated the group’s claims experience credibility at 20%. In establishing the group’s premiums under the new plan, how much weight will the insurer give to the standard manual rate for a comparable group?

Pierre-Marc, aged 32, is a dentist with a rich clientele. His income is substantial. Five years ago, he purchased an “any occupation” disability insurance policy. Today he meets with Joseph, his life insurance agent, to determine whether this type of coverage is still adequate. What should Joseph tell him?

Paul is a self-employed props person in the film industry. A year ago, he purchased disability insurance with an accidental death and dismemberment (AD&D) rider. During a film shoot, the wood floor of the film set catches fire due to his negligence and he loses sight in one eye. His doctor prescribes complete rest for five months. How will the insurer compensate Paul under the circumstances?

Denise, aged 52, is a nurse in a facility for seniors who can no longer live independently. She earns $45,000 a year, with a marginal tax rate of 38%. She has very little savings and is aware that, if she became unable to live independently herself, she could not afford the $4,500 a month it costs to live in a facility such as the one she works at. However, Denise recently learned that she could purchase affordable long-term care insurance. Taking the underwriting requirements into account, how much coverage should she take out?

Bachir owns a successful video game business and has 10 employees. The time has come to plan business succession and the eventual sale of the business. Bachir’s nephew Kharim, who shows a real interest in the business, is identified as his successor. Bachir would like to protect his sales price until such time as the business is sold to Kharim, who does not have the funds yet and will need a few years to amass the required amount. Bachir and Kharim consult insurance agent Bianca for advice. What should Bianca propose?

Josephine visits her dentist in downtown Victoria, BC, to have a cavity filled. The procedure costs her $550 but the maximum fee for a standard filling, according to the provincial dental schedule, is $400. Josephine works for a company that offers employees group dental coverage with a yearly maximum of $1,000 and an 80% co-insurance factor.

How much will Josephine receive from the insurer for her procedure?